THE LENDING PROCESS

This section pertains particularly to financial aid in the form of education loans.

There are a wide variety of education loans. Those serviced by the Student Loan Service Center are called institutional loans. Institutional loans are made using funds controlled by the school. Thus the school is the lender and is responsible for collecting the loans. Most schools lend Perkins Loans, some also have nursing loans and other privately funded loans.

Other types of loans such as Federal Direct Loans are made by the Federal Government and therefore are collected by servicers working for the Federal Government. Alternative Education Loans are loans made by a bank or lender that is not affiliated with a federal lending program. The main thing to remember is that you may have different types of loans and therefore different loan servicers. These servicers will be collecting paperwork and payments, sending out billing notifications and answering questions specific to the loans they are servicing.

The following will give a general outline of the student loan process. For questions pertaining to the specific aid award and disbursement processes please contact your school's Financial Aid Office.

The borrower has been admitted to and is enrolled for courses and has completed their FAFSA.

The school will create a financial aid award based on the borrower's financial need and eligibility.

The borrower may accept the loan(s) from the award and complete the required Promissory Note and Entrance Loan Counseling.

Additional documentation may be required before the loan funds can be released.

Questions about the financial aid award and disbursement process should be directed to your school's Financial Aid Office.

While the student is enrolled half-time or more at the school that issued the loan, the loan is in an In-School status. During this time period payments are deferred.

For most other institutional loans interest will accrue from the day the funds are disbursed (applied) to the student's school account.

Once the student has left the school or drops below half-time enrollment the loan grace period begins.

The grace period varies by loan. For Nursing and Madge Vertin Loans the grace period is 6 months, for the Federal Perkins loans the grace period is 9 months, for most other loans the grace period is 12 months.

The process when a student transitions from In-School status to Grace status is called separation or exiting. During this process the borrower is required to complete Exit Loan Counseling. This counseling is presented in different formats depending on the loan.

Borrower's are also sent the Exit Packet from the Student Loan Service Center. This packet contains forms and documents for the borrower. The Truth in Lending Statement and Student Loan Personal Data Sheet needs to be completed and returned to the Student Loan Service Center.

During the grace period ECSI will contact the borrower via mail at specific intervals to remind them of the grace period expiration date.

Once the grace period has expired the loan enters repayment status. At this time the borrower is responsible for remitting the required payments.

During the repayment status the borrower may qualify for and request benefits such as Deferment, Forbearance and Cancellation in accordance with the terms represented in the loan promissory note.

Once the borrower has made all payments and cleared all principal, interest and fees in full, the borrower's status is changed to Paid in Full. The SLSC will forward a Paid in Full notification to the borrower to serve as proof that the debt obligation has been fulfilled. Please retain this notification indefinitely as proof of the paid in full status.